The chairman's hopes for a fond farewell, and to steer clear of the polarising debate over the environmental impacts of coal seam gas exploitation quickly evaporated, with significant sections of the company’s annual meeting in Adelaide taken up by the persistent line of questioning from farmers and shareholders.

‘‘We do recognise that there is community concern around coal seam gas,’’ said Mr Coates, who is stepping down to take on an executive role at international commodities trader Glencore.

‘‘And we recognise that we have to do a better job with demonstrating to the public that coal seam gas operations can have a positive impact on farming, and minimal and sometimes positive impact on water.’’

‘‘As I’ve said on many occasions, this gas is absolutely essential to the future prosperity of NSW.’’Farmers in the Gunnedah Basin in NSW, including some Santos shareholders, voiced concern that the company’s mining activities in the region could, among many concerns, pollute water aquifers.

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One farmer who travelled to the company’s meeting in Adelaide said a census found 96 per cent of farmers in the region were against coal seam gas mining.

Financial analysts have also warned that rising costs, which risked making its Gunnedah project marginal, were being exacerbated by the risk of community objections. Oil and gas giant Woodside Petroleum recently shelved its $45 billion-plus plans to develop its Browse project in WA.

Santos has also been squarely in the crosshairs of environmental groups after ABC TV’s Four Corners programme exposed the environmental approvals process for its $US18.5 billion Gladstone LNG venture in Queensland as being flawed and unduly influenced by the company.

Santos has rejected the programme’s claims and Mr Coates has implored the industry to focus on the science of coal seam gas mining, rather than the emotion.

At the meeting on Thursday, Mr Coates said the Four Corners programme was ‘‘absolutely absurd and misleading’’.

He said Santos had been exploiting coal seam gas reserves for 20 years without incident, and a 20,000 page environmental impact document had canvassed widespread issues including the Gladstone project’s impact on the great barrier reef and dredging.

‘‘Our safety record speaks for itself,’’ he said.

Mr Coates’ prepared speech, delivered before questions were fielded from the floor, had steered clear of any mention of the potential environmental impacts of coal seam gas mining.

He criticised the lingering uncertainty around government regulatory and environmental approvals, and warn of the rising cost of doing business in Australia.

Mr Coates, who will be succeeded by long-time director Ken Borda, said regulatory uncertainty and duplication continued at both the federal and state level.

‘‘The result is a complex mix of regulatory and policy hurdles, without the appropriate coordination to ensure that developments can be assessed efficiently and effectively,’’ he said.

Mr Coates said he understood the need for governments to ensure that the oil and gas industry operated safely and sustainably, but that it was equally important that projects be allowed to proceed in a timely manner.

‘‘Getting the balance right isn’t easy – but it is essential,’’ he said.

Mr Coates also stressed the need for Australia to address its cost competitiveness as a gas producing nation.

He said Australia had many advantages as a gas producing hub, including being geographically close to the Asian region.

‘‘However, we must protect that position,’’ he said. ‘‘LNG projects are being developed in Canada, East ‘‘Africa and the US.’’

‘‘The challenge for Australia’s projects and for policy makers is to ensure that Australia remains cost competitive. This is the only way that further Australian projects can be sanctioned to meet both domestic and Asian demand. If we don’t remain competitive, others will step in.’’

For Santos, he said, that meant being leaner, more efficient, and prioritising innovation throughout the business.